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India weighs SME market overhaul to boost liquidity and trading
Sebi is reviewing the SME framework after recent expansions that lifted FY26 SME IPO fundraising to a record ₹10,955.1 crore.
India’s securities regulator is considering changes to the rules governing the small and medium enterprise (SME) segment, including potential steps to remove listing restrictions and make SME shares easier to trade, LiveMint Markets reports, citing remarks from Securities and Exchange Board of India chair Tuhin Kanta Pandey.
Sebi said its current market making framework has not delivered enough liquidity and is increasing costs for companies. Pandey argued that designated intermediaries have not underperformed in a way that supports trading, and he said the underwriting system has also not been working as intended.
The review also targets how investors can trade shares after listing. Pandey pointed to the creation of odd lots, smaller share quantities than standard trading lots, saying this can leave investors unable to trade their holdings easily.
Sebi is preparing a comprehensive reform proposal and a consultation paper, according to LiveMint Markets. The effort comes as SME activity has surged, with SME IPOs raising a record ₹10,955.1 crore in fiscal year 2026, up from ₹9,119.9 crore in fiscal year 2025, and 17 SME companies raising ₹733 crore in May after a softer April.